November Mortgage Newsletter

November Mortgage Newsletter

Fed Lowers Rate
On Wednesday October 28th, the fed lowered the short-term interest rate by .25%. This was the 3rd time in 2019 the rate was lowered .25%. The rate is now hovering between 1.5% and 1.75%. The US economy is slowing due to weak global growth and trade disputes.

Federal Reserve Chairman Jerome Powell implied that rates would not be lowered in the coming months since the current rate is “likely to remain appropriate”. This is due to the Fed’s outlook of economic growth and strong employment numbers.

President Donald Trump continues to be critical of the Fed stating the rates should be lower than they are at this time. He has gone as far as saying Powell is a bigger economic enemy than Chinese President Xi Jinping.

Market Crash
Michael Pento of Pento Portfolio Strategies is predicting a recession. “When this thing implodes, we are all screwed. On a Global Scale, we have never created such a magnificent bubble. These central Bankers are clueless and they have proven that beyond a doubt. All they can do is try to keep the bubble going.”

In the last recession, Ben Bernanke was Fed Chair, Quantitative Easing (QE) was introduced. Pento comments regarding the present activity, “Its not QE, its QE on steroids. Everybody knows that this QE is permanent just like any banana republic would do, or has done.”

Rates Continue Volatility
In the past few weeks our rates have been in the range of 3.375% and 3.75%. There are some that are suggesting rates will go under 3%. This is the first I am hearing about a sub 3% rate. That could take some time if it happens at all. In any case, rates are incredibly low and it’s a great time to purchase and refinance. Those that are exploring their refinance options, you may want to consider a shorter term and go from a 30 year to a 20 year or even a 15 year. I will be happy discuss what is best for you.

Current Rates:
30 Year Fixed Rate: 3.375%

FHA 30 Year Fixed: 2.75%

15 Year Fixed Rate: 2.875%

7 Year ARM: 3.25%

10 Year ARM: 3.375%

The rates are still very favorable as we head into the end of the year. Still a great time to be a buyer.

Trends by Market Segment:
The New Jersey Association of Realtors recently released reports for September. Lets take a look at the Single Family Market Segment:

YTD 2018 YTD 2019 % Change
New Listings: 107,521 105,995 -1.4%
Closed Sales: 63,380 62,795 -.9%
Median Sales Price: $315,000 $330,000 +4.8%
Avg Sales Price: $394,695 $406,734 +3.1%
Days on Market 63 63 0.0%
Affordability Index 130 125 -3.8%
Certainly nothing is alarming. If anything, it is a very healthy, well balanced market. Here is data for Condos/Townhouses:

YTD 2018 YTD 2019 % Change
New Listings: 29,470 29,596 +.4%
Closed Sales: 18,248 17,459 -4.3%
Median Sales Price: $260,000 $274,900 +5.7%
Avg Sales Price: $333,106 $345,176 +3.6%
Days on Market 62 62 0.0%
Affordability Index 157 150 -4.5%
Similar to Single Family homes, the Condo/Townhouse market is well balanced. Here are the senior housing numbers:

YTD 2018 YTD 2019 % Change
New Listings: 7,958 8,816 +10.8%
Closed Sales: 5,643 5,768 +2.2%
Median Sales Price: $200,000 $207,000 +3.5%
Avg Sales Price: $230,722 $228,586 -.9%
Days on Market 63 68 +7.9%
Affordability Index 210 203 -3.3%
All 3 market segments are well balanced. I have data for specific townships and would be happy to provide the information upon request. Let me know and I can forward it to you.

Vibha Singh



NMLS ID 66034

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